Real Madrid’s board of directors will ask club members to approve a new €370million (£322m, $391m) loan to cover further spending in their Santiago Bernabeu renovation, with the redevelopment of the stadium now set to cost the club at least €1.4bn.
Madrid’s board has outlined plans to do so in a document sent to members before a general assembly to be held on Saturday, 11 November.
The document says the club would like to borrow more money because of “price revisions” and “unforeseen works” as well as to cover “improvements and complementary facilities” on the project to redevelop its iconic ground.
It is the third loan Madrid’s leadership are looking for and it is highly likely the move will be approved by a majority support among members. When the club requested a second loan for the Bernabeu works in 2021 there were 1,582 votes in favour, 16 votes against and 37 abstentions.
That second loan was for €225million. It was taken in part to fund works on a new retractable pitch system that was not part of the original redesign. A first loan of €575m was taken in 2019.
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These first two loans were granted at interest rates considered favourable by industry experts (2.5 per cent and 1.53 per cent, respectively). However, the interest rate for this new loan will likely be higher.
Both the second and third loans can be considered as project cost overruns, as they were not previously planned. But Madrid sources, who preferred to speak anonymously as they did not have permission to comment, insist that this further borrowing will not be a burden on the club’s finances.
In Madrid’s latest official accounts corresponding to the 2022-23 season, the club also says a “growth in net cash flows” relating to the stadium renovation will “allow the club to amortise the redevelopment investment and continue to grow and be competitive in an increasingly difficult international football scenario”.
The new Bernabeu will bring an increase in capacity by about 4,000 — to approximately 85,000 — and an expanded VIP area. Madrid also plan to use the new ground as a venue for other non-footballing events, such as hosting a leg of Taylor Swift’s The Eras Tour next May, and believe this will provide extra income.
The works began in 2019 and “the essential part” is “expected to be completed by the end of 2023”, according to Madrid’s latest accounts, in which it is explained that the total cost has increased to €1.4billion.
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(Photo: David Ramos/Getty Images)